This paper contains an examination of the changes in US science and technology policies in response to the recently increasing international competition and worldwide economic restructuring. Although historically these policies have been the responsibility of the Federal Government, in recent years the states and local governments have emerged as important partners in a 'grass roots' movement to help bridge the gap between science and industry. The central focus is on overcoming technical, financial, labor market, and community locational barriers to high-technology expansion. The old practice of 'smoke-stack' chasing has given way to inward-looking policies that encourage business start-ups and expansions. Key objectives of state and local government policies are to increase the flow of new ideas into the innovation process, to shorten the time for its initial introduction into a new product or process technology, and for a more rapid assimilation of new technology through-out the regional industrial structure.